Tag Archives: housing market

Citizens Desperate for Effective Public Policies to Save Affordable Housing

Screen Shot 2016-03-19 at 10.33.38 AMHalifax    The discussion of fights between tenants and landlords was a central part of the organizers’ agenda in the ACORN Canada head organizers’ meeting. In Ottawa it was another fight to save the 1300 unit, Herongate, a frequent target. In Toronto and Halifax landlord licensing is an ongoing fight and there were steps forward around inclusionary zoning, but ground zero for much of the struggle was the blazingly hot housing market in British Columbia cities of Vancouver and its satellites cities, where most of our members live, in Burnaby, Surrey, and New Westminster.

Average home prices in Vancouver are now considerably over $1 million. The Premier was in The Globe and Mail promising to end “shadow flipping,” which is a good example of how overheated the market is. Shadow flipping involves a real estate agent, who represents a seller, recommending and securing a “sales contract” from a new purchaser at a fixed price, and then continuing to try to get another buyer to pay more than the original contract and pocketing the difference from the higher price before the deal goes to closing. Shadow flipping is just a fancy term for felony robbery.

What’s the fix for low and moderate income families being pushed out of affordable housing? That was the question before the organizers.

Burnaby was about the worst case. The council has approved something called a “density bonus” for developers, which allows them to pay more, millions more to the city, to go up higher with more units. 20% of the so-called bonus goes to a fund for the creation of affordable housing, though little has been approved or built. 80% goes for civic improvements and amenities in Burnaby. The result is that the city council has a huge incentive to allow for total displacement and gentrification!

Vancouver supposedly has a program of one-for-one replacement for every rental unit lost. The RAP or Rental Assistance Program is supposed to require placement of the tenant before a rental unit can be converted or demolished in comparable housing within a range of 10% of the rent they were paying within a reasonable distance from their current residence. Sometimes this will stop the redevelopment, but in other cases this and other programs are subverted by developers who simply throw money at the lower income tenant which is too good to resist, inducing them to vacate voluntarily with some money in their pockets.

For all of the strategies and public policies discussed the best model that emerged in the discussion centered on the city council of New Westminster. There is no fancy bylaw or housing program, and there have been a lot of developers who have come, blueprints in hand with proposals, and admittedly some of them have been built, but for the most part they have not succumbed to the high-rise, density bonus allures for a simple reason: they just say, “No!” They vote down the proposals that too often simply eliminate the housing without hopes for residents finding replacements.

Protecting affordable housing and our neighborhoods in many cities in Canada may not come as much from fancy, well-crafted policy solutions, but from old fashion, hard-knuckled politics. Moving the developer patsies out of office, and putting home protectors in when the chance arises to pull the voting levers.

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Little Hope for Reform in Foreclosure Settlement Negotiations

New OrlFannie and Freddieeans The industry spins the numbers differently each month.  Foreclosures are rising, but somehow housing markets are being revived by refinancing.  Little of it makes sense and often the information is contradictory, but the bottom line is that housing is still in dire straits across the country.  The home mortgage modification program has been a huge and unmitigated failure noted by almost no one but the millions of homeowners who have hoped and then frustratingly lost their homes or are still hanging out in limbo.

A small glimmer of hope had been offered by the lawsuit filed against banks and mortgage servicers by a small army of state attorneys general.  Today’s Wall Street Journal reported on the progress of the discussions including the government’s proposal for a $20 billion dollar hit.

Under the administration’s proposed settlement, banks would have to bear the cost of all writedowns rather than passing them on to other investors. The settlement proposal focuses on pushing servicers who mishandled foreclosure procedures to eat losses, by writing down loans that they service on behalf of clients. Those clients include mortgage-finance giants Fannie Mae and Freddie Mac, as well as investors in loans that were securitized by Wall Street firms.

Bank executives say principal cuts don’t necessarily improve payment patterns, and have told other parties involved in the talks that principal reductions could raise new complications. First, it will be difficult to determine who gets reductions and who doesn’t. And even if banks agree to a $20 billion penalty, the number of mortgages that can be cured with that number is limited, one of these people said.

If a single settlement can’t be reached, different federal agencies could seek smaller penalties through regular enforcement channels, and banks could face the prospect of separate civil actions from state attorneys general.”

$20 Billion is a nice number for a penalty, but reading the bankers’ whines between the lines, we can already tell that this will be a very sloooowww and drug out process, not the least of which will involve coming up with the assessment on home value and writedown amounts.  There is no way to read the various arguments that bankers are making without seeing them as trial balloons they are letting go to see if any work.  Furthermore the notion of multiple settlements with different federal agencies meting out different penalties sounds like pure and simple chaos, and certainly nothing that will help homeowners.

Hope springs eternal, as the saying goes, so keep fingers crossed, but this early preview indicates that any hope for a happy ending here seems unlikely in another horror show feature.

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